Union Budget focuses on strengthening MSMEs for scale, competitiveness and global reach
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New Delhi, Feb 15 : Placing Micro, Small and Medium Enterprises at the heart of India’s growth strategy, the Union Budget 2026–27 has unveiled a comprehensive plan to help MSMEs scale up, compete globally and integrate deeper into domestic and international markets through financial, policy and professional support, according to the official statement on Sunday.
The Union Budget 2026–27 has underlined the government’s commitment to strengthening Micro, Small and Medium Enterprises as key drivers of economic growth and employment.
MSMEs currently account for around 35.4 per cent of India’s manufacturing output, nearly 48.58 per cent of exports and 31.1 per cent of the country’s GDP.
With more than 7.47 crore enterprises employing over 32.82 crore people, the sector remains the second-largest employer after agriculture.
The Budget outlines three key “Kartavyas” aimed at accelerating growth, fulfilling the aspirations of citizens and building capacities across regions and communities.
Under the first Kartavya, a focused three-pronged strategy has been proposed to help MSMEs grow as champions by providing equity support, improving liquidity and strengthening access to professional expertise.
To boost equity support, the government has announced a dedicated Rs 10,000 crore SME Growth Fund.
The aim is to nurture future champions by incentivising eligible enterprises and supporting their expansion.
In addition, the Self-Reliant India Fund, launched in 2021, will receive an additional Rs 2,000 crore to continue supporting micro enterprises with risk capital.
As of November 30, 2025, the fund has supported 682 MSMEs with investments worth Rs 15,442 crore.
On the liquidity front, the government highlighted that more than ₹7 lakh crore has already been unlocked for MSMEs through the Trade Receivables Discounting System (TReDS).
To further strengthen the platform, it will now be made mandatory for Central Public Sector Enterprises to use TReDS for settling payments to MSMEs.
Credit guarantee support backed by CGTMSE will also be extended for invoice discounting on the platform.
The integration of GeM with TReDS is expected to enable better information-sharing with financiers, ensuring faster and cheaper access to credit.
The government also plans to introduce TReDS receivables as asset-backed securities to deepen the secondary market and improve liquidity.
The Union Budget 2026–27 has underlined the government’s commitment to strengthening Micro, Small and Medium Enterprises as key drivers of economic growth and employment.
MSMEs currently account for around 35.4 per cent of India’s manufacturing output, nearly 48.58 per cent of exports and 31.1 per cent of the country’s GDP.
With more than 7.47 crore enterprises employing over 32.82 crore people, the sector remains the second-largest employer after agriculture.
The Budget outlines three key “Kartavyas” aimed at accelerating growth, fulfilling the aspirations of citizens and building capacities across regions and communities.
Under the first Kartavya, a focused three-pronged strategy has been proposed to help MSMEs grow as champions by providing equity support, improving liquidity and strengthening access to professional expertise.
To boost equity support, the government has announced a dedicated Rs 10,000 crore SME Growth Fund.
The aim is to nurture future champions by incentivising eligible enterprises and supporting their expansion.
In addition, the Self-Reliant India Fund, launched in 2021, will receive an additional Rs 2,000 crore to continue supporting micro enterprises with risk capital.
As of November 30, 2025, the fund has supported 682 MSMEs with investments worth Rs 15,442 crore.
On the liquidity front, the government highlighted that more than ₹7 lakh crore has already been unlocked for MSMEs through the Trade Receivables Discounting System (TReDS).
To further strengthen the platform, it will now be made mandatory for Central Public Sector Enterprises to use TReDS for settling payments to MSMEs.
Credit guarantee support backed by CGTMSE will also be extended for invoice discounting on the platform.
The integration of GeM with TReDS is expected to enable better information-sharing with financiers, ensuring faster and cheaper access to credit.
The government also plans to introduce TReDS receivables as asset-backed securities to deepen the secondary market and improve liquidity.
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